prominent subjects and institutions. In Portugal, the tax on gold accounted for some 10%
of public revenue in 1716, while by the 1760s, just before the gold and diamond mines
started to decline, it provided a fifth of state receipts. Brazil supplied around 40% of
government tax returns at the time of the Marquis of Pombal. In Spain, prior to the
Napoleonic wars, Crown revenues of colonial origin (including the surplus from colonial
chests and those derived from customs duties) represented one-fourth of the total. In
Spain, as in Portugal, bullion not only underpinned regal power but augmented the
incomes of the aristocracy, and thereby reduced their need to increase taxation and rents
from the population. Thus, the colonial empire helped to consolidate and stabilise
traditional institutions and structures of power, status and property rights within Iberia,
implying comparatively few representative institutions there.
The emancipation of the American colonies at the start of the 19th century
marked the end of the Iberian Ancien Regime, and opened the way to liberal revolutions
in Spain and Portugal with implications for the economic development and international
position of Iberia that have remained largely unexplored. Accounts of economic
backwardness in 19th century Iberia have often placed the blame on the loss of empire,
but this may in fact have contributed significantly to the economic and social
modernisation of the peninsula.
3.3. Empires and welfare
The question of why European countries chose to build empires has long been
controversial. Several hypotheses have been proposed, ranging from the purely economic
to the purely political, with several intermediate cases as well. Among the more
economic explanations is the Vinerian view which we have already encountered that in
the absence of integrated international markets, caused largely by insecurity in an age of
widespread piracy and warfare, overseas expansion permitted the creation of reserved
markets, thus intertwining conquest and trade. If Spanish merchants, say, were to be able
to trade in a given area, the Spanish government would have to make this possible by
excluding other merchants and governments from that area, since otherwise the Spanish
would themselves be excluded. This is not to deny that a generally free trading situation
would have been preferable to one in which each country pursued a mercantilist strategy,
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